City sees less in gross receipts taxes last year

Retail shopping in Silver City was down for several months last year, according to figures from the New Mexico Taxation and Revenue Department. As a result, City Hall is going through a little belt-tightening when it comes to personnel hiring.

Town Manager Alex Brown last month told the City Council that gross receipts taxes were off about 9.5-percent from projections.

“If we continue in the fiscal year at this rate, we’d be short $322,000,” he said.

Brown told the Daily Press that there have since been signs of a turnaround, and that he believes there was a glitch in the system the Taxation and Revenue Department uses to keep track of gross receipts taxes.

According to Brown, he became suspicious of the reports when he noticed several irregularities — for example, in one month last year, the department reported $2 million in taxable for the community, despite a total of $12 million in sales. Brown said those fluctuations have become more common.

Brown told the Daily Press he started to work on a three-month average, comparing Fiscal Year 15 to prior years’ data. He also checked on some economic data.

“I’ll look at employment —in Grant County primarily — as the driving factor, and I’ll look at the other counties to kind of see where they’re at,” he said. “There hasn’t been any big factor to show a 9.5-percent decrease.”
“None of the economic indicators showed in any way that we should be receiving this much less than last year,” he said.

Silver City’s overall budget is 3.47 percent below projections, according to Brown, but that figure is coming back up.

“And if this correction continues to work through the end of the fiscal year, I think we’ll come close to it,” Brown said.

Meeting those expectations will go a long way toward determining how the town will spend money during the next fiscal year, but is already having an impact on hiring decisions.

According to Brown, the biggest city expense is personnel costs. He told councilors that he would now prioritize hiring and rehiring of positions.

“I’d rather not refill a position than lay someone off or cut hours,” he said.

He told councilors the city is, “always filling safety-sensitive positions.”

That means police and firefighters will likely have open positions filled immediately.

He said the Department of Public Works and other infrastructure would be next in line, including things like the Sanitation Department.

“And then we get down to quality of life, and then, I’m sad to say it’s the museum and the library that are at the bottom of the totem pole,” he told the Council.

“The last positions I’m going to fill will be new positions with the budget,” Brown said. “I’m not going to do that when I have other positions open in another department.”